Mixed reactions to Fiscal Policy Review

fuel-price-hike
Zvamaida Murwira Senior Reporter

Legislators, bankers and economic experts have expressed mixed views on the Mid-Term Fiscal Policy Review statement presented by Finance and Economic Development Minister Patrick Chinamasa yesterday, with some giving thumbs up while others expressed reservations. Minister Chinamasa introduced a raft of measures aimed at raising resources for the Government.

Some of the measures include raising excise duty on diesel and petrol by five cents each to 30 cents and 35 cents per litre with effect from today. Furthermore, excise duty of 5 percent will also be levied on airtime for voice and data on the same day while an import duty of 25 percent will be imposed on mobile handsets with effect from October 1, 2014.

The measures also include increase in customs duty on both new and used motor vehicles and customs duty on blankets imported as raw materials, with effect from October 1.

Reserve Bank of Zimbabwe Governor, Dr John Mangundya said he was happy with the fiscal measures that were put in place by Minister Chinamasa as they were consistent with what the country intended to achieve.

“It’s quite positive, it addresses the issue of production, which we also raised in our monetary policy statement. He has also introduced instruments to contain unnecessary products into Zimbabwe. On taxation, it is something that people never like but it is necessary for Government to enhance revenue so we need to look at it with a positive mind,” said Dr Mangundya.

“On demonetisation, it will increase confidence, amnesty will give people time for introspection, so the statement is consistent with what we have been talking about.”
Finance and Economic Development portfolio committee chairperson and Mutoko South MP Cde David Chapfika (Zanu-PF), said the policy measures were consistent with Zim-Asset, Government’s economic blueprint.

“The policy is realistic and practical. It is consistent with Zim-Asset, which says let’s utilise the resources that are within our control, which is the land. If we are to import food, we are undermining the resettled farmers. If you look at the goods the minister is discouraging from importation it is mostly agro-based foodstuff, mealie-meal and you name it, so from that point it is pragmatic,” said Cde Chapfika.

He defended the tax measures introduced saying that would stimulate local production and hence the measures were indeed pro-poor.
“As long as you are importing, you indirectly are exporting labour, simple economics will tell you that,” he said.

Former Finance Minister in the inclusive Government and Harare East MP, Mr Tendai Biti (MDC-T), said the policy measures would reverse all the gains of the inclusive Government as it was against the poor.

“All the fiscal measures were aimed at controlling; the cars, cellphones, food you name it. All what it does is that it will simply make capital leave Zimbabwe. I expected a buoyant fiscal policy that would encourage production. On the contrary, we saw a fascist anti-poor policy that will encourage capital flight and that will further the suffering of our people,” said Mr Biti.

Hatfield MP, Dr Tapiwa Mashakada (MDC-T), said the fiscal policy statement missed issues affecting people and showed that the Government had no clue on how to resolve the economic challenges.

“You cannot ban imports when your local industry is not yet ready. You actually create shortages, you must allow your industry to improve and grow and ban gradually especially food. You cannot ban blankets because they are used by ordinary people,” said Dr Mashakada who was Minister of Economic Planning and Investment Promotion in the inclusive Government.

He said people expected to hear how issues of electricity, housing, youth unemployment and liquidity crunch would be addressed.
“We are going to have a bleak Christmas this year,” said Dr Mashakada.

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  • mhofu

    the policy will never increase production as we do not produce fuel locally, handsets and cars, what it only does is to add more burden in terms of taxes on the ordinary people, how can we tax airtime of all things, are not econet,netone and telecel paying taxes directly to the government, we need a focussed and well evaluated policy rather than a burdensome thing like this

    • reason

      In fact they should have taken that money from their ethanol fuel, which is already double the price than in any other place in the country. What was the reason for introducing the blended fuel, they said it would cut the price of fuel drastically and now it turns out to be the other way, thieves.

    • Tarwiraushe

      I,m not a big fan of Tendai Biti,but on this subject he is spot on.This is indeed a fascist anti poor policy that will deepen the economic woes of the ordinary Zimbabwean.Govt should generate more revenue through closing the loopholes that have allowed diamond miners to plunder our minerals without remmiting anything into treasury.Govt should also create more jobs so we can have more Zimbabweans paying taxes, rather than squeezing the few taxepayers who are already over-taxed.Eneact govt policies that will help attract foreign investors rather than the ones that are scaring foreign investors, forcing companies to shutdown or relocate to other countries.Once fuel prices go up,busfares will go up,groceries will go up, this while govt is claiming they can,t afford to give employees pay increases.So how are we supposed to afford,the increases on fuel,or the punishing import duty that we now expected to pay for importing the once affordable blankets and used cars.Gore rino Zim-asset ichatifugisa mabhero nemasaga. Vakomana taona ndondo.

      • Cde Mzvinavhu(Prof)

        May I remind you that when Biti presented his 2011 budget which he had anchored on diamond funds revenue inflow to the Treasury, he quickly discovered that diamonds revenue was being blocked in US banks because the mining companies were on the ZEDRA sanctions list. It is on record that the then Finance Minister naively wrote to the US government requesting the removal of diamonds from the US sanctions.. The US refused to even accept the legitimacy of Zim diamonds trade after the Kimberly Process approval , upto this day..Biti accompanied the then MDC Sec Gen Ncube to the US congress to lobby for the sanctions law , ZEDRA,which disrupts our diamond trade. Biti is therefore not qualified to be on the high moral ground in respect of our economic problems .His political hands are dirty because he supports sanctions. That is the main reason why tiri kuona ndondo!

        • mhofela

          Cde marasika. Hazvireve kuti decision yese yaitwa newebato redu is ok. Honai the views that are being echoed by almost 100% yevanu pano ataurwa na Biti and Mashakada. These are from two MDC formations. Hamusi kuona kuti musangano wedu wakukanganwa ruzhinji here apa cde? Ndinoona kuti dambudziko riri pa parliament. They rubber stamp policies that don`t affect them. Vakapinda mu office vakati hatibhadhare duty remota , hatibhadhare ma toll fees etc. So they no longer represent the views of their consituents coz ma conditions edu atosiyana. Hu MP nehu minister ratove basa rekutsvaga mari. Kwete to serve the people. That`s why ministers and MPs demand respect from you yet murimi makavavhotera.Musangano wedu waita sekupererwa cde . Kana ari ma sanctions amuri kureva then maybe let`s admit kuti we have failed. Kwete kuonesa vanhu ndondo. Handizvo zvatakarwira here zviri kutaurwa neruzhinji pano? Muri idiot cde wangu. Sorry about that.

          • Cde Mzvinavhu(Prof)

            I dont agree with you that our government has lost interest in the welfare of the people. Your strong feelings against ZANUPF is what exactly those who imposed sanctions hoped to see . One US Senator declared when moving the ZEDRA bill that the law would make the Zim economy squeezed until the people start squealing like pigs and they remove Cde MUGABE, because of the land issue.We are in the struggle to consolidate our sovereignty and fighting neo colonial forces, represented by MDCs . Your minority view that we have failed is wrong because the majority still believe our party deserves more support. The referendum in which we entrenched the land reform and elections votes in 2013 prove you wrong. The majority understand the evil effects of sanctions. Your lame views are those of MDCT.

    • H

      Hahaha Airtime chete here, ko mablankets!

  • Cde Mzvinavhu(Prof)

    Cde China presented a budget that speaks directly to our current economic situation , where revenue sources are stunted. Comments from former Finance minister are just empty sour grapes reaction . What gains is he talking about with respect to the buried GNU. Biti should, instead apologise to the poor people who are sufffering because of sanctions. The same applies to the clueless Mashakada, a supposed economist , who should understand the satanic effects of sanctions. Both MDC politicians are approaching the debate on the budget with dirty political hands because they still support sanctions in the hope that suffering masses will run away from ZANUPF. They should applaud Cde China for trying to live within the budget constraint until the economy creates more revenue sources. Given the current circumstances,the budget is plausible and pro bono publico.

  • it engineer

    Biti ataurawo chokwadi for the first time

  • James Charles

    Zanu yazvitadza Izvi, zvaramba zvekuti nyika inakire varombo. I wonder where we are going

  • Command Center

    Maiwee zvangu. This Government is doomed, kupererwa chaiko. Ana Chinamasa vakazoita maMinisters of Finance rinhiko, honai hoo, honai hoo, honai woo, honai woh. This is *******. Well said Biti and Mashakada. Since the split apa Biti ndoo pawataurawo zvinemusoro apa. Why did you split.

  • King

    We will remain poor no matter how you try to justify your increase on taxes, Companies are closing in simple context what does that mean to your increase on taxes. We need to build our country, we need employment, we need water in our tap, we need lights in our house, we need food not increase on taxes i was no pleased at all. It seems like we are good on Taxes, we are killing our on believed country walk up guys smell coffee.

  • makwavarara

    what about those on landline?

  • frustrated

    Mwari pindirai in our country.Just make sense out of all this.

  • leemoyo

    This is a duck policy and I am very surprised that the RBZ governor is in support of such nonsense. I would have thought the first hammer should hit luxury cars for gvt officials with only the president allowed to drive a luxury import. Everyone else should be in a 323 Willowvale assembled. Thats clear 2 billion every 4 years.
    Instead on banning food imports and create shortages – gvt should actually be moving with time- 1. allow chemicals duty free (agricultural), authorise GMOs on maize. The world over people eat GMOs and all developed countries have them. There is no evidence of side effects as lied by our politicians.
    Once our food situation is stable- the flow on effect will trigger business opportunities.
    Surely for a govt to think it will raise money from airtime is crazy and stupid. For hair products it will cost them more to police it than to raise revenue or stop it. Phone companies should just introduce other technically advanced packages to evade such nonsense. Another way is to partner with other organisations such as World Remit so that the transaction is done online and all we can see is airtime.

  • Tati

    Nguruve dzodya vana vadzo. Chegore rino

  • Tati

    Uri kuda kuvhundutsira ani iwe nhari. Dress properly if you want to be on this platform. This platform is for people that want to contribute meaningfully to articles like this one.